Indian Buget 1997-98

The Indian Annual Budget was announced yesterday – feb 28th. It is supposed to be one that will spur investment and a progressive one. This file (attachment below) was sent in my friend, Pramila Maheshwari with the following comments:

“…budget is quite friendly, focused more on infrastructure and agriculture , and China scenario doesn’t seem to be near by,with inflation to increase by 1% contrary to increase in per capita income by 7.4%…India’s growth is intact”

Also attached is the Speech by Finance Minister, Mr Chidambaram.

What do you think of this budget? I will try and bring some expert analysis on this budget.

Excise duty on cement reduced from Rs.400 per tonne to Rs.350 per tonne for cement bags sold at Rs.190 per bag at retail market. Those sold above Rs.190 will attract excise duty of Rs.600 per tonne.

Corporate tax: No surcharge for firms with a taxable income of Rs 1 crore (Rs 10 million) or less.

E-governance allocation to be increased from Rs.395 to Rs.719 crore.

Indian investors to be allowed investment in overseas capital markets through mutual funds. Mutual funds to set up Infrastructure Fund schemes.

Any requirement for security of the nation to be provided.

Backward Regions Grant Fund to be raised to Rs 5800 crore.

A high-powered committee report aimed at making Mumbai a world class financial centre submitted. Public suggestions will be invited.

Rs 50 crore provided to begin work on vocational education mission for which Task Force in Planning Commission is chalking out a strategy.

1,396 Indian Technical Institutes to be upgraded to achieve technical excellence.

An autonomous Debt Management Office in government to be set up.

Government to create one lakh jobs for physically challenged. Government will reimburse the EPF contributions of employers in the case of physically challenged people taken on rolls of the company and included in the PF scheme. A fund of Rs 150 crore to be started which will go up to Rs 450 crore.

An Expert Committee to be set up to study the impact of climate change in India.

Rs 150 crore to be given to Ministry of Youth and Sports for Commonwealth Games and Rs 350 crore to the Delhi Government for the purpose. Rs 50 crore to be provided for the Commonwealth Youth Games in Pune.

Rs 100 crore for recognising excellence in the field of agricultural research.

VAT revenues increased by 24.3 per cent in the first nine months of 2006-07.

A national level goods and services tax to be introduced from next fiscal.

Fiscal deficit to be 3.7 per cent in the current year and revenue deficit two per cent.

Fiscal management enabled States consolidate debt to the tune of Rs.1,10,268 crore and 20 states availed of debt waiver to the tune of Rs.8575 crores. The share of States from the revenue expected to touch Rs.1,42,450 crore during 2007-08 as against Rs.1,20,377 crore during 2006-07.

Total expenditure estimated at Rs 6,81,521 crore.

Increase in gross tax revenue by 19.9 per cent, 20 per cent and 27.8 per cent in first three years of UPA government. Intend to keep tax rates moderate.

Manufacturing sector grows at 10.7 per cent, agriculture at 1.5 per cent during October-December 2006-07.

Excise duty for plywood reduced from 16 per cent to eight per cent.

Food mixes to be fully exempted from excise duty.

Excise duty for plywood reduced from 16 per cent to eight per cent.

Bio-diesel to be fully exempted from excise duty.

Water purification devices, small and big, fully exempted from excise. Specific rates of excise duty on cigarettes increased.

Excise duty on Pan Masala without tobacco as mouth freshners reduced from 66 per cent to 45 per cent.

PAN to be made single identity card for all securities/stocks/MFs related transactions.

Insurance companies to launch a senior citizens scheme in 2007-08.

Defence budget increased to Rs 96,000 crore

Tourism infrastructure to get an allocation of Rs.520 crore as against Rs.423 crore last year.

The ceiling of loans for weaker sections under deferential rate of interest scheme will be raised from Rs 6500 to Rs 15,000 and in housing loan from Rs 5000 to Rs 20,000.

Regulations would be put in place for mortgage guarantee company for housing loans.

Regional Rural Banks, which are willing to take up greater responsibilities, to undertake aggressive branch expansion programme. One RRB branch for each of 80 districts so far uncovered. RRBs to accept NRE and FCNR deposits.

FDI inflows between April and January this fiscal touched $12.5 bn while portfolio investment reached $6.8 billion

Technology Upgration Fund in textiles to continue during the 11th Plan. Rs 911 crore to be provided for this.

Allocation for National Highway Development programme to be stepped up from Rs 9,955 crore to Rs 12,600 crore.

Work on Golden Quadrilateral road project nearly complete. Considerable progress made on North-South, East-West corridor and likely to be completed by 2009.

Scholarships programme for minorities students to be of the order of Rs 72 crore for pre-metric, Rs 48 crore for graduate and postgraduate.

Total Budget for the Northeastern region raised from Rs 12,041 crore to Rs 14,365 crore.

New Industrial Policy for the northeastern region to be in place before March 31.

Women’s development allocation will be Rs.22,282 crore.

Rs 7,000 crore allocation for better tax administration to be used for social schemes.

Rs 2,25,000 crore farm credit proposed in the new budget. A target of additional 50 lakh farmers to be brought under farm credit.

Farmers’ credit likely to reach Rs.1,90,000 crore as against the targeted Rs.1,75,000 crore during 2006-07.

Special Purpose Tea Fund to rejuvenate tea production.

Rs 100 crore allocated for National Rainfed Area Authority.

One hundred per cent subsidy for small farmers and 50 per cent for other farmers for water recharging scheme.

World Bank signed agreement for revival of 5,763 waterbodies in Tamil Nadu. Loan component Rs 2,182 crore. To have a command area of four lakh hectares. Similar agreement with Andhra Pradesh in March for recharge of 2,000 bodies. Command area 2.5 lakh hectares.

Bonds worth Rs 5,000 crore to augment NABARD to be issued.

Death and disability cover for rural landless families to be introduced, known as ‘Aam Aadmi Bima Yojana’.

70 lakh households to be covered under a social welfare scheme with LIC and with support from state governments.

50 per cent of the premium at Rs.200 per household to be given by the Centre. Rs.1,000 crore fund to be maintained by LIC for the purpose.

Central public sector enterprises will be given Rs 16,261 crore as equity support and loans of over Rs 2600 crore.

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